Needs analysis and client fact-finding
This domain tests structured fact-finding: gathering the facts and priorities that make a recommendation defensible, and quantifying the gap between what a client has and what they need.
The fact-find
- Quantitative: income, expenses, assets, liabilities, mortgages, dependants and ages, existing policies, ACC entitlements, employer benefits, KiwiSaver position.
- Qualitative: goals, priorities, health history, occupation, risk tolerance, time horizon, attitudes to cover and affordability.
- Housekeeping: privacy consent, identification, service scope and any limitations on the advice.
Gap analysis by risk
Work through death (debts, income replacement, education, funeral), disability (income replacement to retirement), trauma (lump sum for treatment and mortgage relief) and health (access to private treatment). Then prioritise by probability, impact and affordability rather than selling every product.
Documentation
The Code's client care standard requires the file to show what the client told you, what you recommended, and why. Recorded detail is what protects both parties if a claim or complaint arises.
Worked example
A couple aged 40 and 38, two children, $600,000 mortgage, incomes of $90,000 and $50,000, and employer death cover of twice salary. Income replacement on the higher earner to age 65 plus mortgage clearance shows a life and TPD gap near $500,000. Priority: death/TPD cover first, then income protection, then health cover as budget allows.
Traps
Jumping to a product before understanding goals; ignoring existing employer and ACC cover; treating a risk-tolerance questionnaire as the whole analysis; and failing to record when a client declines a recommended cover.